Kathmandu, February 24

Gold price was set at Rs 56,000 per tola — Rs 300 more than the price on Tuesday — and nearly a two-year high, today.

The last time the precious yellow metal was traded at the current level was on March 20, 2014.

The demand for precious metals has gone up significantly in the recent weeks largely as a safe-haven asset given the equity doldrums and overall risk aversion.

The price of precious metals in the domestic market is governed by their rates in the international markets.

Investors have been channelling money into bullion, as shown by flows into exchange-traded funds (ETFs), Reuters reported today.

“The inflows so far have been able to offset the lack of interest from key Asian buyers, who have taken advantage of the gold rally to sell bullion and take profits. Discounts in India are at a record of about $50 an ounce to the global benchmark, while in China they are at about $1.”

The precious metal is the best performer among commodities this year as concern about slowing global growth and slumping oil prices spurred financial-market turmoil and increased speculation that the Federal Reserve will hold off on raising US borrowing costs.

As investors piled into bullion-backed funds and producers’ shares jumped, forecasters have been prompted to rework their outlook for 2016, as per Bloomberg News.

Gold may rally to as high as $1,400 an ounce should risk aversion intensify, according to top-ranked precious metals forecaster, who dubbed bullion a ‘superhero’ when raising his outlook for 2016.

As per Barnabas Gan, Oversea-Chinese Banking Corp economist, the metal may remain above $1,200 this quarter and possibly into next as investors seek a haven, Bloomberg said. “Singapore-based Gan, who previously saw prices dropping to $950 at the end of the year, revised his outlook in a February 19 report, and now sees a range of $1,000 to $1,150 by the end of 2016.”

Meanwhile, although silver eased 0.3 per cent in the international market, according to Reuters, its price remained constant at Rs 735 per tola in the local market today.